SYDNEY (CU)_Over the recent years, there has been growing interest across the globe in cutting back on carbon emissions and minimising global warming. Accordingly, there is increasing pressure on the government of Australia, one of the largest per capita carbon emitters in the world, to make stronger commitments to contribute its fair share in this global effort.
According to recent studies, the property industry that is said to be accounting for nearly a quarter of greenhouse gas emission in the Pacific nation. This has been reaffirmed by the CSIRO, the Australian Government agency responsible for scientific research, which found that about nine million new homes built in 2020, accounting for 90 per cent, fail to meet the 7 star rating under the Nationwide House Energy Rating Scheme (NatHERS).
Accordingly, a major initiative has been launched by Australia’s largest non-bank financial institution, Firstmac, in collaboration with the Clean Energy Finance Corporation (CEFC) and top Japanese bank Norinchukin, in order to assist the property industry in slashing its greenhouse gas emissions.
According to a statement issued by the CEFC, $750 million has been raised by Firstmac through a green mortgage-backed securitisation where all underlying mortgages are backed by environmentally friendly housing. Firstmac will make this total amount available in order to offer its first Green Home loan product tied to NatHERS. Accordingly, existing Firstmac home loans which comply with the global Climate Bonds’ Low Carbon Buildings Criteria, valued at about $520 million, will be included in the initial seed pool. Another $230 million will be made available to Australian homeowners in the form of discounted green home loan finance.
“Green home loans are an effective way to use our finance to benefit Australians over the long term. With this new investment we have now committed more than $580 million to cleaner greener homes Australia wide, including more than $220 million to green home loans,” CEFC chief executive Ian Learmonth said. “With the average home having a life span of 50 years or more, these investments have the potential to lock in lower energy consumption over the long term, as well deliver more comfortable homes that are cheaper to run.”
Meanwhile, Firstmac has revealed that there is an increase in customer demand for financial products which assist in Australia’s transition to a greener future. The Brisbane-based financial institution has responded to this by slashing its base interest rate for all construction loans and home loans that are less than one-year-old, where the home has a 7 star energy rating under the NatHERS.
“We are pleased to support efforts for a sustainable future and deepen our existing relationship with similarly-minded organisations like Norinchukin and the CEFC, in issuing the first Australian 100 per cent Green RMBS Transaction,” Firstmac’s Managing Director Kim Cannon said. “Firstmac has offered discounted green car finance to buyers who choose low emission vehicles. The success of this program has led Firstmac to now develop this innovative green home loan product. If you are environmentally conscious, then Firstmac is the logical choice for your financing needs.”
